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ZURICH: Swiss financial regulator FINMA is planning to loosen anti-money laundering rules for smaller financial technology firms, part of a drive to boost innovation and shore up the country’s position as a leading money management hub.

The revisions, prompted by a new ‘fintech’ licensing category carved out by the Swiss parliament in June, will clarify how non-banks applying for the new licence must ensure due diligence.

“As a rule, all financial institutions are subject to similar due-diligence requirements relating to combating money laundering. However, as most fintech licence applicants are likely to be smaller institutions, FINMA proposes to introduce some organisational relaxations for such institutions,” the financial supervisor said in a statement on Tuesday.

Its proposal defines small institutions as those with gross revenues under 1.5 million Swiss francs ($1.5m).

Under its terms small institutions, unlike banks, will not for instance have to establish an independent anti-money laundering unit with monitoring duties, it said.

The move comes after Switzerland’s parliament voted in June to amend the Swiss Banking Act, creating a new fintech licence category to ease rules imposed on financial endeavours that take in funds and provide certain bank-like functions, but do not make money by investing or receiving interest on the funds.

Switzerland, the world’s largest centre for offshore wealth, has gained prominence in recent years as a hub for financial technology providers, such as banking software groups Temenos and Avaloq, as well as cryptocurrency projects.

But advocates have warned that as banks face increasing margin pressure and tougher competition from technological rivals, more must be done to promote innovation if Switzerland is to remain a leading financial hub.